Dow Chemical falls in middle of supply chain amid concerns over oil prices


Shares of chemical company Dow fell about 1% to close at a price of $ 59.26 per share on Thursday, despite announcing substantial earnings gains in its third quarter results.

Net sales increased 53% year-over-year and 7% from the previous quarter to $ 14.8 billion, while operating profit was $ 2.75 per share, from $ 0.50 one year ago. Dow even reported net income of $ 1.7 billion, down from a loss of $ 1 million last year in the comparable quarter.

While these numbers have exceeded analysts’ expectations, investors have focused more on high commodity prices and supply chain constraints that have limited profitability.

Merchandise

Dow supplies valuable commodity chemicals like silicone and polyethylene to create products related to commodities and crude oil.

The company’s stock is therefore closely tied to global supply chains, commodity prices, and trade relationships – all of which were highly volatile in the previous quarter, with little sign of it going down in the near to medium term.

Oil prices hit multi-year highs during the quarter and supply chains continue to be clogged with inactive vessels at sea awaiting ports to open.

“Despite the higher energy costs and industry-wide value chain disruptions from hurricanes on the US Gulf Coast, our proactive storm preparations have allowed us to keep our team safe. and our operations, and recover quickly, ”said Jim Fitterling, President and CEO, in a statement.

“In addition to our global presence, flexibility in raw materials and structural advantages in terms of costs, we continued to capture strong end market demand and price dynamics. “

Dow share performance

Dow Jones shares rose 9.66% on the year, but took a negative turn midway through the year as concerns over supply chain issues and oil prices began to rise. to augment.

The shares peaked at a price of $ 71.38 in May, but have since fallen more than 16%.

In 2019, DowDuPont split into three distinct companies: its chemical activity under Dow, its science activity under Dupont de Nemours and its agricultural activity called Corteva.

Read more: Oil giant Baker Hughes misses Street’s expectations

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